UAE banks post mixed results for Q1

Banks in the UAE announced mixed results for the first quarter yesterday.

Abu Dhabi Islamic Bank (Adib) yesterday announced net profit of Dh293.3 million for the first quarter of 2010 against Dh268.3m in Q1 2009, an increase of 9.3 per cent. Its operating profit increased 10.3 per cent to Dh398.5m in Q1 2010 from Dh361.3m for the comparative period last year.

Total provisions also rose to Dh105.2m for Q1 2010 against Dh93m in Q1 2009. Total assets as of March 31 were Dh66 billion, representing an increase of 20 per cent compared with Dh 55.1bn for the corresponding period last year.

Customer deposits continued to show a healthy growth of 21.5 per cent to Dh49.9bn from Dh41.1bn at the same time last year. Capital adequacy ratio stood at 16.84 per cent.

The bank extended a Dh300m facility to the Al Dhafra Co-operative Society; an additional Dh100m in financing to a major UAE university; and Dh300m in incremental finance in regard to a significant environmental project in the first quarter of this year.

Adib's stock-brokerage subsidiary, Abu Dhabi Islamic Financial Services, posted a profit of Dh1.4m for Q1 2010, a significant turnaround after it posted a loss of Dh9.1m in Q1 2009.

At Burooj, the group's real estate subsidiary, profit plunged to Dh2.1m in Q1 2010 against Dh11.8m in Q1 2009. The bank expects the rest of the year to remain challenging for the real estate firm. "While the brunt of the legacy portfolio's cost of credit was absorbed in 2009, we expect to take further prudent measures in 2010 and, depending on how the credit and investment environment evolves, this will include further credit provisions and impairments. Notwithstanding this, we are confident that the bank is on the right track as witnessed by our headline numbers and believe that group profitability is being restored," said Tirad Mahmoud, Adib's CEO.

The bank said net customer financing increased to Dh42bn with a growth ratio of 17.3 per cent, compared to Dh35.8bn at the end of March 2009 and Dh40.5bn at December 31, 2009.

National Bank of Umm Al-Quwain (NBQ) and United Arab Bank (UAB) have posted net profits of Dh100.11m and Dh65.5m respectively for the quarter ended March 31, 2010, the banks announced yesterday.

NBQ's net profit is down by 9.7 per cent over the Dh110.87m it reported in March 2009, while UAB's profit figures are almost the same as they were for the same quarter last year.

NBQ's operating profit during the period before net investment income and provisions amounted to Dh117m, the bank said in a statement to the Abu Dhabi Securities Exchange. NBQ's loan and advances portfolio amounted to Dh8.32bn while its customer deposits were Dh7.58bn during the same period.

The bank's total assets fell by Dh940m to Dh 12.94bn as on March 31 this year, compared to total assets of Dh13.88bn on March 31, 2009. During the same time, NBQ's share capital increased to Dh1.568bn and total shareholders' equity stood at Dh2.944bn.

The management of UAB believes that net profit for the quarter is in line with the profit figure achieved during the same period last year. UAB's customer deposits stood at Dh4.32bn on March 31, 2010 compared to loans and advances of Dh4.67bn on the same date.

Commenting on the outlook, Paul Trowbridge, Chief Executive Officer of UAB, said: "Despite the general market conditions, we shall continue to focus on quality in terms of assets and the services provided to customers, in order to achieve our expected 2010 results.

"UAB has been consistent in maintaining steady growth in its operations and financial performance. Going forward, and while intending to maintain its conservative approach, the bank is expanding its businesses in niche retail segments such as Islamic financial services and wealth management, which are expected to enable UAB to keep up the momentum throughout 2010."

UAB became part of a GCC regional banking alliance in December 2007 upon the acquisition of a 40 per cent interest in UAB by the Commercial Bank of Qatar, Qatar's largest private sector bank.

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